Why is sales & operations planning so hot?
Tom Wallace at Supply Chain Digest has written a series of pieces on sales & operations planning that are quite good. The first article is called “Why is sales & operations planning so hot?” and the second is “Sales & operations planning - the bang for the buck.”
Sales & operations planning IS a hot topic for many of the reasons Tom indicates. Probably the biggest is the reality that things don’t stand still anymore - the market and your business are in a constant state of movement and change.
A big part of the S&OP process is coordination - and we’re seeing this move higher and higher in the organization given the critical importance to the success of the company. We’re also seeing a greater need for empowerment throughout the organization to align strategy with execution and ensure this coordination doesn’t just stop at the planning level. This is critical because, as stated, things are constantly changing today. So, while a more robust S&OP process helps with coordination, the organization also needs to be in a position to deal with the inevitable changes that come about after the plan is in place - and many times these changes number in the hundreds each day. As one customer told us, “we build a great plan….then the phone rings.”
So, we see companies investing in building a better plan, but also in how to deal with the inevitable changes that come as soon as the plan is in place. A good analogy to compare this contrast between planning and responding to changes can be found in the military. The military is premised on solid planning - having contingencies for all possible outcomes. Yet, the military also invests in dealing with the unexpected, by arming pilots with heads up displays providing real-time, actionable information to empower pilots to deal with circumstances not taken into account in the planning process. The same thing is happening in major companies - they are improving their plannign by investing in processes like S&OP, while simultaneously arming their front-line decision makers with the information and tools they need to ensure the organization as a whole is becoming more agile and responsive to change.
